Cornerstone OnDemand Expands Product Line-Up

According to a  360 Market Updates report, the global talent management software market is estimated to grow by $5.4 billion, at 11% CAGR through 2020-2024. The current pandemic has accelerated the adoption of mobile technologies within the industry. Players like Cornerstone OnDemand (Nasdaq: CSOD) are delivering new products and learning modules to help gain market share.

Cornerstone OnDemand’s Financials

Revenues for the quarter grew 37.6% to $199.50 million with subscription revenues growing 35.1% to $185.6 million. The market was looking for revenues of $188.44 million. EPS of $0.51 surpassed the market’s estimates of $0.21.

For the current quarter, the company forecast revenues between $194-$197 million. For the year, it forecast revenues between $728-$731 million. The market was looking for revenues of $195.76 million for the quarter with an EPS of $0.27. The Street expects the company to end the current year with revenues of $729.98 million with an EPS of $1.40.

Cornerstone OnDemand’s Product Growth

Recently, Cornerstone announced the formation of its AI innovation lab. Cornerstone Innovation Lab for AI is a center of excellence inside the company that is composed of both data scientists and machine learning experts who specialize in innovating practical and ethical ways to add AI technology into the workplace. The innovation lab has already assisted in designing and building its skills engine, the Cornerstone Skills Graph. The technology creates practical uses of AI throughout the organization’s business by performing actions like uncovering people’s existing skills, identifying skills that are necessary for the job roles, and pivoting their roles faster. With this, employees are able to take more control of their career development and can unlock a greater understanding of their personal skill gaps, allowing them to access things like the needed content to help with immediate learning needs.

Earlier last quarter, Cornerstone also announced the launch of its content creation arm, Cornerstone Studios. Cornerstone Studios is focused on creating new content series under the Cornerstone Originals brand to help organizations and their people prepare for workforce changes facing the world today. Its content is focused on addressing problems such as how to create a more equitable workplace and how to ensure people put their customers first. Some of the exclusive content released recently includes project management lessons through H Files, DNA: Digital Native Advancement, and Made for Now – a series aimed at rewarding high performing individuals. Cornerstone has been building content for learning and development for a while. It has delivered over 1,000 courses across 4 languages to 75 million professionals in the past year alone.

The talent management software space boasts of competition from the likes of big players including Workday, Oracle, and SAP. There has already been some consolidation in the space. Last year, Cornerstone had announced the $1.3 billion acquisition of rival Saba. SAP had made significant inroads into the market when it acquired SuccessFactors in 2011 for $3.4 billion and Oracle followed it by acquiring Taleo in 2012 for $1.9 billion. Workday has a suite of human capital management SaaS solutions that provide talent management, talent acquisition, and performance management capabilities. Plus, when it comes to content, there are the likes of LinkedIn from Microsoft.   

Cornerstone’s stock is trading at $42.66 with a market capitalization of $2.7 billion. It had fallen to year low levels of $22.22 in March this year. The stock was trading at year-high levels of $64.45 at the start of the year last year.